2Q - The growth of the American economy in the 1950s and the impact of the ‘consumer society’
Learn how production, spending and public policy supported the 1950s boom, and why a society of increasing consumption remained unequal.
The foundations of growth
Economic growth in the 1950s built on the productive capacity expanded during the war. American firms supplied a large domestic market and overseas demand, while new machinery, management and technology increased productivity. Large corporations could finance research and investment; unions in major industries negotiated wages and benefits which helped workers become consumers. A relationship between high output and purchasing power sustained growth, although its gains were uneven.
Public spending was part of this supposedly private-enterprise success. Defence orders during Korea and the wider Cold War supported aircraft, electronics and other industries. Veterans' education and housing support increased skills and demand. Highway construction later stimulated building, transport and development. The state was therefore a purchaser, financier and organiser of opportunities as well as a regulator. It is misleading to describe the boom as either wholly government-made or wholly independent of government.
Population growth strengthened the market. The baby boom meant more families needing housing, schools and household goods. Rising incomes and easier borrowing supported purchases. Nevertheless the economy had recessions in 1953–1954 and 1957–1958, with another downturn beginning in 1960. The long-run expansion did not guarantee secure employment every year. A useful explanation separates the enduring foundations of growth from temporary fluctuations and the different experiences of particular workers.
Consumer goods, credit and advertising
A consumer society is one in which buying and using goods plays a major role in economic growth, everyday life and social status. In the 1950s cars, televisions, refrigerators and washing machines became attainable for increasing numbers of households. These products could save time, widen entertainment or increase mobility; consumption was not merely imaginary satisfaction created by advertising.
Instalment credit allowed a household to obtain a product before paying its full price. It brought future income into present demand, widening access and helping factories sell mass-produced goods. The same mechanism could create debt and insecurity if income fell. A rising volume of purchases therefore did not show whether every purchaser had greater long-term financial security.
Advertising connected products with comfort, success and desirable family life. Television gave advertisers access to a mass audience inside the home. Standardised brands, chain stores and franchises made goods and services recognisable across the country. Consumption could provide practical benefits while also encouraging people to measure success by their possessions.
Vance Packard's The Hidden Persuaders (1957) criticised advertisers' use of psychological techniques. The Smithsonian's advertising collection places the book within a longer debate about advertising. Treat it as evidence of contemporary criticism, rather than proof that all consumers were helplessly manipulated. The historical question is how commercial messages shaped demand and social expectations alongside real needs and rising incomes.
Consumer society
A society in which widespread purchasing of goods and services is central to economic activity and increasingly influences lifestyle, status and identity.
Suburbs, cars and public investment
Suburban growth joined home ownership to the consumer boom. Mass-building methods, exemplified by Levittown, reduced the cost of producing houses for families leaving crowded cities. Government-backed mortgages helped many buyers. A new home generated demand for appliances, furniture and a car, while expanding shopping centres and service businesses supplied suburban customers. Housing was therefore a multiplier of demand, not just a result of prosperity.
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